Corrected: BP declares force majeure on acetic acid from Texas plant

24 July 2012 00:06[Source: ICIS news]

Correction: In the ICIS story headline “BP declares force majeure on acetic acid from Texas plant” dated 23 July 2012, please read in the second paragraph…is operated and owned by Eastman Chemical … instead of … is operated by BP …and owned by Eastman Chemical …. A corrected story follows.

HOUSTON (ICIS)--BP on Monday declared force majeure (FM) on acetic acid from a Texas plant as a result of production issues.

The 590,000 tonne/year Texas City plant is operated and owned by Eastman Chemical.

BP said in a Monday letter to customers that it had not received acetic acid from the plant since 3 July, and it did not expect to receive any in the near future as a result of production issues.

The company cited an unspecified incident on 20 July that involved a Praxair unit that supplies carbon monoxide to the acetic acid plant.

BP said the Praxair unit had already been down because of compressor issues but had been expected to start up around 20 July.

BP told customers it had suspended shipments as of 22 July, and said it was trying to obtain additional product.

“While the force majeure declaration is required at this time, BP is continuing to work on commercial options to lessen the impact on customers,” the company said.

“All discretionary sales have been terminated.”

A source close to BP confirmed the letter.

Eastman spokeswoman Kristin Sturgill said Eastman customers who received acetic acid from the company’s main unit in Kingsport, Tennessee, would not be affected by the force majeure.

Sources on Monday said they did not know what impact the force majeure would have on US acetic acid spot prices, which as of 17 July were assessed at $550-595/tonne (€457-494/tonne).

Major US acetic acid sellers include BP, Eastman Chemical and Celanese.